German regions resist green energy reforms

BERLIN, March 30 (Reuters) – Regional politicians in Germany
threatened on Sunday to block the government’s long-awaited
planned reform of its subsidies for renewable energy, piling
pressure on Energy Minister Sigmar Gabriel as he finalises a
draft law.

The reform, closely watched by power markets, is due to go
to cabinet on April 8 and Chancellor Angela Merkel meets the
premiers of Germany’s 16 federal states on Tuesday to try win
their backing.

Germany’s shift to green energy and away from nuclear power
and fossil fuels is one of Merkel’s flagship policies but the
cost of ballooning subsidies is threatening to undermine it. The
reform is aimed at scaling back incentives.

Christine Lieberknecht, the conservative premier of the
state of Thuringia, told the Tagesspiegel newspaper that the
plans could “under no circumstances” remain as they are.

She, like Bavarian premier Horst Seehofer, objects to
planned reductions in support for biomass, which she described
as “disproportionate”.

“Most states do not want to accept the law as it is,” she
told Monday’s edition of the paper, according to excerpts
released in advance.

The premier of the northern state of Schleswig Holstein has
also opposed the proposals.

The plan, a balancing act between maintaining growth in the
renewables sector and keeping heavy industry on board with
affordable power, envisages cuts of up to a third in green
subsidies by 2015 but also reduces support for industry.

Economy and Energy Minister Gabriel, a Social Democrat (SPD)
in the right-left coalition with Merkel’s conservatives, told
German television he saw possibilities for agreement on Tuesday.

“We will see if we get there on Tuesday, we will try. We
just have to see that we must decide,” he told ARD television.

Gabriel has dropped an initial proposal to make industrial
firms pay renewable energy surcharges for existing on-site power
plants. That would have cost them 500 million euro euros a year.

The plans are likely to get through the Bundestag lower
house thanks to the grand coalition’s overwhelming majority but
they could face delays in the Bundesrat upper house which
represents the federal states.